Should ATM fees be capped at 50 cents?

What are you paying these days to use an ATM, particularly one that's outside your bank's network?

Guess what, folks. Banks are collecing an average of $2.66 per ATM transaction, according to the Federal Reserve. And, say our friends at MarketWatch, the cost can be $5 (and, we bet, even more) if you tap an ATM at the casino or airport.

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U.S. Sen. Tom Harkin, D-Iowa, estimates that each transaction costs -- at most -- 36 cents. Harkin has introduced an amendment to the financial reform bill that would cap  ATM fees at 50 cents to keep them in line with actual costs. Banks, we imagine, are not amused.

Why would they squawk? Bankrate.com estimates that ATM fees charged to nonbank customers increased more than 12.6% last year. (At the same time, the fee your bank charges you when you use another bank's ATM actually dropped.)

So far, the National Association of Federal Credit Unions has written a letter to senators opposing the limit on ATM fees. It says a 50-cent fee won't cover the costs of maintaining so many machines in so many locations. The letter said, "While some institutions have charged exorbitantly high fees for transactions processed at their ATMs, we do not believe that this amendment takes the right approach in tackling this problem." (We added the emphasis.)

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Your bank generally won't charge an ATM fee if you withdraw money from one of its machines. The problem occurs when you use one outside the network. Bankrate explains:

If you use a so-called "foreign" ATM, you can expect to pay two fees. Your bank will charge a fee because it has to process a transaction from some other bank's ATM, and the bank that owned the ATM will charge a fee -- called a surcharge -- because it has to process a transaction from someone who's not a customer. It's a double whammy, and it's very costly.

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Harkin said, "Under the current structure, banks charge consumers fees for using ATMs while also collecting fees from other banks. This amendment restricts the double-dipping that benefits banks and costs consumers."

There's been no action on Harkin's amendment yet, and who knows how far this will get.

Meanwhile, how can you avoid paying ATM fees?

• Switch to a bank that doesn't charge an ATM fee, and use only ATMs in its network. Some banks don't charge you for going out of network, and some also reimburse fees charged by another bank.
• "Another idea is to look for an Allpoint ATM. if your financial institution is a member of the surcharge-free network, where surcharges are eliminated," The New York Times Bucks blog says.
• Go cash only. Withdraw a set amount at the bank each week, and don't spend any more, suggests Lisa Schmeiser at SFGate.com's Dollars & Sense blog.
• Use an app on your phone to find ATMs in your network, she also suggests.
• Use your credit or debit card to make all your purchases, or use the "cash back" feature of your debit card. There's usually no charge for that.

What's your take? Are these fees an onerous burden or a  price you're willing to pay for the convenience of accessing cash wherever you are? (I rarely use an ATM, but when I do, it belongs to my bank.)

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